Chile. CCU 2010 Net Profit Falls 13.5% To CLP110.7 Billion

Chilean beverage company Compania Cervecerias Unidas SA's (CCU, CCU.SN) 2010 net profit dropped 13.5% to 110.7 billion Chilean pesos ($229.8 million) on nonoperational charges last year, compared with CLP128.0 billion the year earlier, the company said late Wednesday. The company attributed the decrease in net profit to a higher inflation rate, which increased the cost of servicing its inflation-indexed debt, and to a one-time gain of CLP24.4 billion in the year-earlier period, generated from the sale of its 29.9% stake in Aguas CCU-Nestle SA. Additionally, CCU pointed out that the peso's strong gains versus the dollar last year, trading at 31-month highs in December, hurt its wine export business. Wine sales account for 12.6% of CCU's consolidated revenue. The stronger peso, however, helped to partially offset higher costs, some of which are denominated in dollars, in its other business units. CCU's sales last year increased to CLP838.3 billion, from CLP776.5 billion in 2009, despite last February's devastating earthquake and tsunami, which rocked central-southern Chile and affected the company's beer and wine production. Consolidated volume sales, meanwhile, grew 4.5% in 2010 to 5.2 million hectoliters. Its Ebitda--or earnings before interest, taxes, depreciation and amortization--rose 14.2% on the year to CLP207.3 billion, while CCU's operating result increased 18.0% to CLP162.0 billion. Late last year, CCU acquired a cider business in Argentina as it continues its regional expansion. "Looking ahead, we will not only continue our efforts to grow and strengthen our current core business organically, but also to actively pursue a strategy of inorganic growth in beverage and food related businesses, domestically as well as in surrounding markets," CCU said in a statement. Early Thursday, CCU's shares were gaining 0.3% to trade at CLP5,050.00, while the blue-chip Ipsa index was falling 0.2%. Over the last 52 weeks, CCU's shares have traded at a low of CLP3,837.20 and a high of CLP5,899.40, and gained 26.0% over the same period. CCU makes and bottles beer, soft drinks, mineral water and fruit juices. It also distills pisco-grape brandy and rum. It has beverage licenses for products from Heineken NV (HINKY, HEIA.AE), Anheuser-Busch InBev NV (BUD, ABI.BT), PepsiCo Inc. (PEP), Paulaner Brauerei AG, Schweppes Holdings Ltd., Guinness Brewing Worldwide Ltd. and Nestle SA (NSRGY, NESN.VX).